My name is Auggie, and I’m a 1-year-old golden retriever/Irish setter. I was born on a small farm in Oregon. My favorite pastimes are swimming in the river and working on my rock collection. I also love sticks and playing with other dog friends. I have a 5-month-old baby sister that I protect fiercely and cuddle with by trying to sit on her. If you’d like to follow along with my adventures, you can find me on Instagram @auggiethegoldenirish! Meet Auggie!
3 Ways to Reduce Your Taxes
By Adding Charitable Giving to Your Estate Plan
You are likely well aware of the tax benefits that come from donating to charity during your lifetime. But did you know that incorporating charitable giving into your estate plan can have similar perks? Here are three of the most popular ways to reap those rewards. LEAVE MONEY TO CHARITY IN YOUR WILL OR REVOCABLE LIVING TRUST Naming a charity as a beneficiary in your will or living trust can reduce the taxable value of your estate, thus reducing estate taxes for your heirs. That said, the current federal estate tax exemption is $11.7 million per person, so unless you are super wealthy, you won’t see any tax benefit — at least at the federal level. However, 17 states currently have estate taxes that kick in at lower exemption amounts. Individuals named as beneficiaries of your retirement account (IRA, 401(k), 403(b), etc.) have to pay income taxes on any distributions they receive, but since charities are tax-exempt, they receive the full amount of your retirement account assets. Additionally, you receive a tax deduction for the charitable contribution, which can offset estate taxes. Under recent changes to the SECURE Act, it may be more beneficial from a tax-saving perspective to leave your retirement assets to charity, while passing on your non-retirement assets to your loved ones. NAME A CHARITY AS THE BENEFICIARY OF YOUR RETIREMENT ACCOUNT SET UP A CHARITABLE REMAINDER TRUST (CRT) If you have highly appreciated assets like stock and real estate to sell, you can use a CRT to avoid income and estate taxes — all while creating a lifetime income stream for yourself or your family and supporting your favorite charity. CRTs are “split- interest” trusts, so the non-charitable beneficiary receives annual income from the trust, and whatever assets “remain” at the end of your lifetime (or a fixed period up to 20 years) pass to the named charity or charities. The methodology is complicated, but ultimately this strategy helps you avoid capital gains tax and produce income using the untaxed proceeds of the sales of your assets. Want to learn more? Meet with us to determine the best way to achieve your charitable objectives while maximizing your tax savings.
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